-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NVU5qOageSaXp80cu99ynWCgphdkYEjz9LuBl1uf6BbruKzIbtdtpk28jzm09qVO 4c0yWRTCAmjMLFgL/H9biw== 0000950152-96-002258.txt : 19960513 0000950152-96-002258.hdr.sgml : 19960513 ACCESSION NUMBER: 0000950152-96-002258 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960510 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: LANCASTER COLONY CORP CENTRAL INDEX KEY: 0000057515 STANDARD INDUSTRIAL CLASSIFICATION: FABRICATED RUBBER PRODUCTS, NEC [3060] IRS NUMBER: 131955943 STATE OF INCORPORATION: OH FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-04065 FILM NUMBER: 96559919 BUSINESS ADDRESS: STREET 1: 37 W BROAD ST CITY: COLUMBUS STATE: OH ZIP: 43215 BUSINESS PHONE: 6142247141 10-Q 1 LANCASTER COLONY 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Commission file number 0-4065-1 LANCASTER COLONY CORPORATION (Exact name of registrant as specified in its charter) OHIO 13-1955943 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 37 WEST BROAD STREET, COLUMBUS, OHIO 43215 (Address of principal executive offices) (Zip Code) 614-224-7141 (Registrant's telephone number, including area code) NONE (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- As of March 31, 1996, there were approximately 29,753,000 shares of common stock, no par value per share, outstanding. 1 of 9 2 LANCASTER COLONY CORPORATION AND SUBSIDIARIES INDEX Page No. -------- Part I. Financial Information Consolidated Condensed Balance Sheets - March 31, 1996 and June 30, 1995 3 Consolidated Condensed Statements of Income - Three Months and Nine Months Ended March 31, 1996 and 1995 4 Consolidated Condensed Statements of Cash Flows - Nine Months Ended March 31, 1996 and 1995 5 Notes to Consolidated Condensed Financial Statements 6 Management's Discussion and Analysis of the Results of Operations and Financial Condition 7-8 Part II. Other Information Item 6 - Exhibits and Reports on Form 8-K 8 Signatures 8 Exhibit 27 - Financial Data Schedule 2 of 9 3 LANCASTER COLONY CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS
March 31 June 30 1996 1995 ---- ---- (Unaudited) ASSETS Current Assets: Cash and equivalents $ 8,398,000 $ 8,239,000 Receivables - net of allowance for doubtful accounts 110,335,000 88,416,000 Inventories: Raw materials and supplies 34,634,000 34,020,000 Finished goods and work in process 111,643,000 107,866,000 ------------ ------------ Total inventories 146,277,000 141,886,000 Prepaid expenses and other current assets 14,279,000 11,226,000 ------------ ------------ Total current assets 279,289,000 249,767,000 Property, Plant and Equipment - At cost 309,609,000 282,525,000 Less Accumulated Depreciation 183,318,000 169,338,000 ------------ ------------ Property, plant and equipment - net 126,291,000 113,187,000 Goodwill - net of accumulated amortization 20,744,000 13,761,000 Other Assets 2,522,000 3,189,000 ------------ ------------ Total Assets $428,846,000 $379,904,000 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Current portion of long-term debt $ 705,000 $ 1,026,000 Accounts payable 39,844,000 26,322,000 Accrued liabilities 32,382,000 33,164,000 ------------ ------------ Total current liabilities 72,931,000 60,512,000 Long-Term Debt - Less current portion 31,370,000 31,840,000 Other Noncurrent Liabilities 8,273,000 8,223,000 Deferred Income Taxes 2,545,000 2,181,000 Shareholders' Equity: Preferred stock - authorized 2,650,000 shares issuable in series; Class A - $1.00 par value, authorized 350,000 shares; Class B and C - no par value, authorized 1,150,000 shares each; outstanding - none Common stock - authorized 35,000,000 shares; issued March 31, 1996 - no par value - 31,094,000 shares; June 30, 1995 - no par value - 30,765,000 shares 38,226,000 28,086,000 Retained earnings 321,582,000 280,538,000 Foreign currency translation adjustment 548,000 501,000 ------------ ------------ Total 360,356,000 309,125,000 Less: Common stock in treasury, at cost March 31, 1996 - 1,341,000 shares; June 30, 1995 - 936,000 shares 44,072,000 29,420,000 Amount due from ESOP 2,557,000 2,557,000 ------------ ------------ Total shareholders' equity 313,727,000 277,148,000 ------------ ------------ Total Liabilities and Shareholders' Equity $428,846,000 $379,904,000 ============ ============
See Notes to Consolidated Condensed Financial Statements 3 of 9 4 LANCASTER COLONY CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended Nine Months Ended March 31 March 31 1996 1995 1996 1995 ------------- ------------- ------------- ------------- Net Sales $ 200,459,000 $ 191,975,000 $ 640,416,000 $ 606,353,000 Cost of Sales 140,151,000 132,770,000 445,168,000 420,188,000 ------------- ------------- ------------- ------------- Gross Margin 60,308,000 59,205,000 195,248,000 186,165,000 Selling, General and Administrative Expenses 30,920,000 31,899,000 102,289,000 100,064,000 ------------- ------------- ------------- ------------- Operating Income 29,388,000 27,306,000 92,959,000 86,101,000 Other Income (Expense): Interest expense (659,000) (672,000) (2,218,000) (2,060,000) Interest income and other - net (19,000) 197,000 (128,000) 423,000 ------------- ------------- ------------- ------------- Income Before Income Taxes 28,710,000 26,831,000 90,613,000 84,464,000 Taxes Based on Income 10,943,000 10,418,000 35,069,000 32,750,000 ------------- ------------- ------------- ------------- Net Income $ 17,767,000 $ 16,413,000 $ 55,544,000 $ 51,714,000 ============= ============= ============= ============= Net Income Per Common Share $ .60 $ .55 $ 1.87 $ 1.72 Cash Dividends Per Common Share $ .17 $ .14 $ .49 $ .40 Weighted Average Common Shares Outstanding 29,818,000 29,905,000 29,781,000 30,080,000 ============= ============= ============= =============
See Notes to Consolidated Condensed Financial Statements 4 of 9 5 LANCASTER COLONY CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
Nine Months Ended March 31 1996 1995 ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 55,544,000 $ 51,714,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 17,846,000 17,322,000 Deferred income taxes and other noncash charges (1,220,000) (2,622,000) Loss on sale of property 94,000 311,000 Changes in operating assets and liabilities: Receivables (21,191,000) (15,395,000) Inventories (3,651,000) (17,295,000) Prepaid expenses and other current assets (1,175,000) (2,086,000) Accounts payable 12,892,000 8,279,000 Accrued liabilities (491,000) (6,193,000) ------------ ------------ Net cash provided by operating activities 58,648,000 34,035,000 ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Payments on property additions (31,601,000) (22,502,000) Acquisition (554,000) Proceeds from sale of property 1,739,000 439,000 Other - net (195,000) (383,000) ------------ ------------ Net cash used in investing activities (30,057,000) (23,000,000) ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Purchase of treasury stock (14,652,000) (16,922,000) Payment of dividends (14,566,000) (12,012,000) Payments on long-term debt (791,000) (1,026,000) Common stock issued, including stock issued upon exercise of stock options and related tax benefits 1,520,000 2,271,000 ------------ ------------ Net cash used in financing activities (28,489,000) (27,689,000) ------------ ------------ Effect of exchange rate changes on cash 57,000 47,000 ------------ ------------ Net change in cash and equivalents 159,000 (16,607,000) Cash and equivalents at beginning of year 8,239,000 30,423,000 ------------ ------------ Cash and equivalents at end of period $ 8,398,000 $ 13,816,000 ============ ============ SUPPLEMENTAL DISCLOSURE OF OPERATING CASH FLOWS: Cash paid during the period for: Interest $ 2,767,000 $ 2,575,000 ============ ============ Income taxes $ 36,833,000 $ 41,541,000 ============ ============
See Notes to Consolidated Condensed Financial Statements 5 of 9 6 LANCASTER COLONY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS FOR THE PERIODS ENDED MARCH 31, 1996 AND 1995 (1) The interim consolidated condensed financial statements are unaudited but, in the opinion of management, reflect all adjustments necessary for a fair presentation of the results of operations and financial position for such periods. All such adjustments reflected in the interim consolidated condensed financial statements are considered to be of a normal recurring nature. The results of operations for any interim period are not necessarily indicative of results for the full year. Accordingly, these financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company's annual report on Form 10-K for the year ended June 30, 1995. (2) Net income per common share is computed based on the weighted average number of shares of common stock and common stock equivalents (stock options) outstanding during each period. (3) During the second quarter ended December 31, 1995, the Company acquired all of the common stock of Dolefam Corporation via a stock-for-stock transaction. Such transaction was accounted for under the purchase method of accounting. In conjunction with the acquisition, the Company issued approximately 273,000 shares of Lancaster Colony Corporation common stock having a fair market value of approximately $9,000,000 in exchange for cash of $380,000 and other assets and liabilities having a fair market value of $1,888,000 and $841,000, respectively. The noncash aspects of this transaction have been excluded from the accompanying Statement of Cash Flows. 6 of 9 7 LANCASTER COLONY CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE RESULTS OF OPERATIONS AND FINANCIAL CONDITION FOR THE PERIODS ENDED MARCH 31, 1996 AND 1995 RESULTS OF OPERATIONS For the nine months ended March 31, 1996, consolidated net sales of $640,416,000 increased 6% over the 1995 total of $606,353,000. Similarly, net sales for the three months ended March 31, 1996 increased 4% to $200,459,000 compared to $191,975,000 in 1995. These sales increases primarily reflect the growth of candle-related sales within the Glassware and Candles segment as well as increased foodservice sales achieved by the Specialty Foods segment. Automotive segment sales declined as affected by generally unfavorable economic conditions and competitive market pressures. These trends continue into the Company's fiscal fourth quarter. Consolidated gross margin percentages of 30.5% and 30.1% reported for the respective nine and three month periods ended March 31, 1996 have remained relatively constant compared to those achieved during the corresponding periods of fiscal 1995. The increased volume attributable to foodservice customers contributed to reduced margins in the Specialty Foods segment as have market constraints on pricing. Additionally, margins within the Automotive segment have been adversely affected by higher overhead absorption rates associated with lower production volumes. These negative factors have been offset by an improved sales mix and production efficiencies achieved within the Glassware and Candles segment. Despite notable fluctuations in certain specific commodities, the overall effect of fluctuations in raw material costs throughout the Company have not been significant. Selling, general and administrative costs totaled $102,289,000 during the nine months ended March 31, 1996, a 2% increase from the comparable period of 1995. For the three months ended March 31, 1996, such costs decreased from the 1995 period by 3% and totaled $30,920,000. These fluctuations do not correspond directly to fluctuations in net sales for the related periods primarily due to changes in sales mix. The total of other income and expense for both comparable periods presented was adversely affected by increased interest expense incurred on short-term borrowings outstanding during the first and second fiscal quarters of 1996, and by a decline in interest income on reduced invested funds during all of 1996. As a result of the foregoing factors, consolidated operating income for both the nine and three months ended March 31, 1996 of $92,959,000 and $29,388,000, respectively, increased 8% over the comparable periods of fiscal 1995. Similarly, net income of $55,544,000 and $17,767,000 for the respective nine and three month periods ended March 31, 1996 increased 7% and 8%, respectively, over each of the corresponding periods ended March 31, 1995. FINANCIAL CONDITION Cash flows from operating activities totaled $58,648,000 for the nine months ended March 31, 1996 compared to $34,035,000 during the corresponding period ended March 31, 1995. Additionally, net current assets and the current ratio at March 31, 1996 were $206,358,000 and 3.8:1.0, respectively. The corresponding amounts at June 30, 1995 were $189,255,000 and 4.1:1.0. The increases in accounts receivable and inventories at March 31 compared to June 30 are primarily attributable to greater sales recorded in the quarter ended March 31 and changes in sales mix. Investing activities associated with cash flows included $31,601,000 expended for capital additions during the nine months ended March 31, 1996. Such additions through March 1995 totaled $22,502,000. The single largest project in the current year relates to an expansion of distribution capabilities at the Leesburg, Ohio candle manufacturing facility. 7 of 9 8 FINANCIAL CONDITION (CONTINUED) Notable financing activities during the current fiscal year include the purchase of $14,652,000 in common stock of the Company as well as $14,566,000 paid in dividends on common stock. The latter amount is 21% greater than the dividends paid during the comparable period of fiscal 1995 and reflects a higher per share dividend rate paid during fiscal 1996. Management anticipates that cash provided from future operating activities and from the currently available discretionary bank credit lines will be adequate to meet the Company's foreseeable cash requirements over the remainder of fiscal 1996. In a November 1995 transaction accounted for as a purchase, the Company issued approximately 273,000 shares of its common stock in exchange for all the common stock of Dolefam Corporation, a manufacturer and distributor of specialty food products. Dolefam's results of operations have been included in the consolidated financial statements from the date of acquisition and are immaterial in relation to the consolidated totals. PART II. OTHER INFORMATION Item 6 - Exhibits and Reports on Form 8-K (a) Exhibit 27 - Financial Data Schedule. (b) Reports on Form 8-K - There were no reports filed on Form 8-K for the three months ended March 31, 1996. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. LANCASTER COLONY CORPORATION Date: May 10, 1996 BY: /S/John B. Gerlach --------------------------------- JOHN B. GERLACH Chairman, Chief Executive Officer and Principal Financial Officer Date: May 10, 1996 BY:/S/John L. Boylan --------------------------------- JOHN L. BOYLAN Treasurer and Assistant Secretary 8 of 9 EX-27 2 EXHIBIT 27
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE REGISTRANT'S CONSOLIDATED CONDENSED BALANCE SHEET AND STATEMENT OF INCOME FOR THE NINE MONTHS ENDED MARCH 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS JUN-30-1996 MAR-31-1996 8,398 0 113,272 2,937 146,277 279,289 309,609 183,318 428,846 72,931 31,370 0 0 38,226 275,501 428,846 640,416 640,416 445,168 445,168 0 0 2,218 90,613 35,069 55,544 0 0 0 55,544 1.87 0
-----END PRIVACY-ENHANCED MESSAGE-----